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FirstFT: Today’s top stories

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Leaders of the G7 economies convening in the UK will announce a pledge to provide 1bn coronavirus doses to poorer countries as part of a plan to “vaccinate the world” by the end of 2022.

The move, to be outlined at the start of the three-day summit on Friday, is designed to address criticism that wealthy western governments have secured the bulk of life-saving Covid-19 vaccines from manufacturers to immunise their own populations.

The vow is also an attempt to counter “vaccine diplomacy” by Beijing and Moscow, which have been quick to sell their jabs to developing nations. Hosting the G7 summit in Cornwall, Britain’s picturesque southern tip, prime minister Boris Johnson is due to announce on Friday that the UK will donate 100m surplus vaccine doses in the next 12 months, according to aides.

More G7 news:

  • Boris Johnson and Joe Biden tried to smooth over their differences on Northern Ireland in their first face-to-face meeting.

  • Swiss-based multinationals such as commodities trader Glencore will receive subsidies and other incentives under plans that Switzerland is drawing up to maintain its competitive tax rates, even as the country prepares to sign-up to the G7’s plan for a global minimum tax on big businesses.

  • Experts have warned that “pleading” from countries to exclude industries from the G7-backed deal on corporate taxes risks derailing a final accord.

FT economics editor Chris Giles and global tax correspondent Emma Agyemang answered your questions on what the G7 tax deal means for multinational companies. Here are the highlights from the conversation.

Coronavirus digest

  • Goldman Sachs will demand that its US bankers disclose whether they have been vaccinated ahead of a planned return to the office next week.

  • The company producing the AstraZeneca vaccine in Thailand is owned by the monarch, which makes criticism of delays all but impossible.

  • The European Central Bank will maintain the pace of its bond purchases in the coming weeks, despite increasing its forecasts for eurozone growth and inflation.

  • Opinion: The Covid lab-leak theory shows that the “fact wars” are still raging, writes Jemima Kelly.

Follow our live coronavirus blog here and sign up for our Coronavirus Business Update newsletter.

In the news

US consumer prices climb at fastest pace since 2008 US consumer prices increased by the most in nearly 13 years in May compared to a year ago, as inflationary pressures continued to flare in the world’s largest economy.

Probe finds Toshiba colluded with government A 147-page report released on Thursday details the collaboration between the Japanese company and the Tokyo government and alleges that prime minister Yoshihide Suga, who was chief cabinet secretary at the time, received updates on activists’ campaigns ahead of the July 2020 annual meeting, which it ultimately concluded was “not fairly managed”. 

Aide to Chinese vice-president faces corruption trial Dong Hong, a former Chinese anti-graft investigator who worked closely with vice-president Wang Qishan, will go on trial for allegedly accepting “extremely large” bribes, according to the Supreme People’s Procuratorate.

Japanese sponsors fear brand damage from Tokyo Olympics Corporate sponsors of the Tokyo Olympics have brought in marketing consultants to determine whether a direct association with the Games would damage their brands.

Global banking regulator urges toughest capital rules for crypto Banks with exposure to volatile cryptocurrencies should face stricter capital requirements to reflect the higher risks compared to conventional stocks and bonds, the Basel Committee on Banking Supervision, the world’s most powerful banking standards-setter, said on Thursday.

China’s environmental goals fire up metals prices China’s pledge to reduce carbon emissions by the middle of the century will require large cuts in the production of metals, potentially adding further fuel to an already rapid rise in commodity prices as the world emerges from the coronavirus pandemic.

UK competition regulator plans Amazon probe The watchdog is planning a competition investigation into Amazon, mirroring a continuing EU probe, after focusing for months on how the online retailer uses the data it collects on its platform. Separately, Prologis, Amazon’s landlord and the world’s largest owner of industrial real estate, is doubling down on the vast ecommerce warehouses that flourished during the pandemic.

Column chart of Net income, rolling 4-quarters ($bn) showing Prologis profits

The day ahead

G7 summit kick-off The summit will begin formally on Friday and run through the weekend. A failure to adequately address vaccine shortages and climate change would be disastrous, writes our editorial board.

Euro 2020 begins The Euro 2020 tournament kicks off on Friday. Fatigue will be a bigger factor than usual since many of the world’s top players have been playing almost nonstop for a year because of the pandemic’s impact on schedules. (NYT)

What else we’re reading

Japanese flashbacks US finance editor Robert Armstrong wrote in his Unhedged newsletter that there are reasons to believe the 2021 US stock market is analogous to the Japanese market in 1987. Several readers who worked in Japanese finance in the late 1980s responded, commenting on how much today’s environment reminded them of that era. Sign up here to receive Unhedged in your inbox.

“Japan was hit worse than most by the oil shock in the 1970s. They had a weak currency, and oil imports were 10 per cent or more of GDP. They ran a very loose monetary policy for a long time, leading to a stock market boom in latent asset stocks . . . With massive liquidity flowing . . . companies would issue stock convertible bonds with warrant sweeteners because the interest rates were so low. I once asked a cement company why they raised money, and the answer was, basically, because it’s cheap, and we can.” — James Bogin, who worked as an analyst in Tokyo in 1987

The ‘Cornwall consensus’ is here An advisory memo written by a committee of academics and policymakers and circulated before the G7 meeting sets out an “ambitious agenda to build forward better from the pandemic”. It suggests that the G7 corporate tax accord should herald a new phase of western collaboration along new ideological lines, writes Gillian Tett.

How Trojan Shield exposed a criminal underworld Unbeknown to hundreds of criminals — who until this week believed that encrypted messaging platform Anom was the best way to arrange drug deals, money laundering and murders — the FBI was secretly copied in on every message. Here’s how the operation shone a light on the black market for privacy-oriented platforms.

Rich Americans are losing no sleep over Biden’s tax plans The elaborate US system rewards those who can afford armies of lawyers and accountants, writes Edward Luce. The one area where President Joe Biden’s plans would ruffle feathers, however, is in his capital gains reform.

A defanged US auditor is an investor disaster Gary Gensler must reclaim the Public Company Accounting Oversight Board from the grip of the Big Four, writes Brooke Masters. Robust auditing is critical for preventing misbehaviour, as decades of scandals such as those at Enron, Carillion, Wirecard and Luckin Coffee make clear. 

The plutocrats’ guide to space tourism Amazon founder Jeff Bezos is set to go to space on July 20 — or tomorrow if he subscribes to Prime. The opening of the space market could not be more timely because, frankly, it’s getting very hard to plan a holiday at the moment, and suborbital flight looks likely to be on the green list, writes Robert Shrimsley.

© Lucas Varela
© Lucas Varela

Podcast of the day

Can Asian prosperity survive US-China rivalry? South-east Asia has enjoyed a long period of sustained economic growth. But is this endangered by rising tensions between the US and China? Gideon puts this question to James Crabtree, executive director of the International Institute for Strategic Studies in Singapore.

Thank you for reading. Please send your recommendations and feedback to [email protected]

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